Where Should Married Couples Deposit Their Salary?

How should a married couple manage their finances together?

If you are getting married or even married, this is one of the most important topics any couple should talk about. For which, I am focusing one basic fundamental question – Where should married couples deposit their salary into?

Disclaimer: I certainly do not hold a degree or PhD in marriage, hence, this is entirely my personal opinion.

There are typically 3 types of setup a married couple can manage their finances. Each of these setups has its pros and cons and would do well depending on how the family is made up.

1) One person holds the Key to the finances.

One person holds the majority of the finances in the household.

Typically found in olden days where one of the parents is a sole breadwinner and gives allowance to the other party.

In modern days, this could still be pretty common in certain cultures where one party passes all the finances to the other party to control or manage.

More commonly in China, we would often hear the phrase “I pass my bank card to my wife” – meaning the wife would actually be controlling the family finances even if the husband is the sole breadwinner.

Pros

Should only be used when one party has poor money management and needs to be rein in by the other party.

The pros in this setup only work effectively when the one controlling the majority of the finances is an effective money manager.

Cons

It creates an imbalance of power in the relationship, where one spouse needs to depend on the other for simple bread and butter.

Funds can be inaccessible and problems may arise in case of emergency when the party in need of urgent funds is not the key to the finances.

Banking laws do not allow a spouse to withdraw on behalf of their spouse unless their account is joint.

No check and balance. This type of setup has zero checks and balance which can give rise to moral hazard should one party loses his entire savings to bad finance habits or gambling problem.

2) Some money to Joint Account and some money in own Account

The model that most people in our generation used as most families in Singapore are dual income.

Each of the couple portions a little of their money into a joint account while keeping a separate account. Household expenses would typically be spend using the joint account while personal splurges could still be consumed in their own account.

Pros

Check and Balance. This has greater check and balance and helps to control household expense and allows better household finances.

Privacy. You get to continue enjoying splurging when you need to without needing to ask permission.

Access to emergency fund. In cases of emergency either party would have access to a large portion of the family finances.

When you get a treat or a birthday surprise from your spouse you know its not coming from your money.

Cons

Incomplete Check and Balance. Either party could go into debt or say lose their job, the other party would not be able to notice.

Expensive splurges. Since you still get to use your own money, sometimes there’s a greater tendency for us to buy things we don’t need when no one is looking.

Should the income gap between the couple is wide, conflicts could occur on how much one should put in the joint account.

3) Most money into a joint account

Most or even all a family finances are placed into one joint account.

Personally, I would encourage you to do so if you are able to do so. I personally believe that a married couple should work as one and that includes managing the family finances. Once one gets married, there is no such thing as “his” or “hers” anymore.

Ultimately, this model can be applied in the areas investment as well as insurance.

Pros

Complete transparency. You come bare naked in this setup – you can’t gamble or spend money unwisely without the other party knowing.

Access to the emergency fund. In cases of emergency, either party would have access to a most of the family finances.

Better interest. Accounts such as BOC and UOB one Account have a tiered base interest system. Young married couples can consider pooling their money together to hit the higher interest rate.

Lesser money conflicts. When you no longer view money as “his” or “hers” but rather as “ours”, you no longer worry about who should pay the bills as both of you would be paying.

Cons

It takes just 1 person to lose it all. If your relationship goes south, be wary one party could just take it all.

Big Surprises need advance planning. One cannot really purchase big-ticket items without the other party finding out. So you might need to figure out a way to prevent the big-ticket item from appearing on your credit card bills.* hint that’s why u still have a smaller personal account*

Check out our blog for more unbiased opinions on your personal finance journey.